At a time when Congress is looking to cut the budget, the DoD is pleading for $517M USD in extra funding to keep up with the soaring costs of crude oil. (Source: Tatan Syuflana/AP)

Without extra funding, the U.S. Air Force could be grounded and unable to defend the nation. (Source: USAF)

The U.S. DoD is hoping that biofuels will hold the key to safe, cheap fuel in the long term. (Source: California Polytechnic State University's Controlled Environment Agriculture & Energy Working Group)

Soaring gas prices have hit defense budgets, and served as a reminder of the volatility of oil

Between Iraq and Afghanistan alone, the U.S.
Department of Defense needed an enormous amount of fuel last year -- the U.S.
government uses 20 to 50 million gallons of fuel every month in Afghanistan to
support operations. In fact, of the $15B USD it spent on fuel, 75 percent went
towards operations, such as the efforts in these Middle Eastern nations.

I. Massive Demand, Soaring Costs

The thirstiest branch of the armed forces was the
U.S. Air Force (USAF). They used $8.1B USD in fuel, including $7B USD in
costs for jet fuel. The USAF burned through 54 percent of the DoD's fuel
budget, sipping 2.5 billion gallons of fuel.

The aforementioned figures come courtesy
of Air Force assistant secretary for installations, environment and
logistics Terry Yonkers. Speaking at the Pew Charitable Trusts in
Washington, Asst. Secretary Yonkersexpressedalarm at
rising fuel costs and the impact they might have on the nation's ability to
defend itself.

At a time when Congress is looking to slash the
budget, the DoD is requesting an injection of $517M USD in extra cash to keep
up with rising oil prices. According to the request, the price per barrel
of oil rose from $127.26 in April to $165.90 by June 1.

In reality, that $517M USD will likely not be
nearly enough to cover the 30 percent higher costs, considering that 30 percent
of last year's budget totaled almost $5B USD. But facing a cuts-minded
Congress, that may be the best the DoD can hope for.

The DoD is running on empty and desperately needs
a solution in the long term to secure the nation in the face of continually
rising fuel costs. Asst. Secretary Yonkers believes the answer lies in
biofuels, like algae-based oil. Currently biofuelsare
quite expensive, costing $40 to $50 USD per gallon. Given that
there's about 45 gallons of petroleum products in a barrel of crude oil,
petroleum was at approximately $3.69 USD/gallon, or roughly 1/11th of the cost
of biofuel.

New biofuels like algae have an advantage over
other alternative fuels like ethanol, in that they contain the larger
hydrocarbons necessary for jet fuel and other high-energy blends. In that
regard, they're quite similar to petroleum products. Because of that, 98
percent of the USAF's aircraft canrun
on a biofuel blend (though the allowed amount of biofuel in the blend
is application-dependent).

One obstacle is that while the DoD commands a
substantial stake in the U.S. fuel market, it's still a small player in terms
of total demand. Last year it reportedly accounted for 2 percent of the
nation's fuel budget. That is a large amount, but it also represents how
much the DoD needs the other 98 percent, which includes civilian and corporate
use, to support biofuel development.

In the short term, the U.S. could look to domestic
drilling options to try to drop fuel prices. However, there are issues
there too. Most "easy" fuel in the U.S. has already been
extracted -- much of the remaining fuel requires complex extraction procedures.

Some studies indicate that extraction from oil
shales and their ilk can be done safely, with minimal environmental impact.
But asNPR's "This American Life"points
out, this research is often biased by the fact that top petroleum research
universities are dependent on petroleum grants for funding and are afraid to
publish negative studies.

The actual impact of domestic drilling may be
significantly higher than the oil and gas companies would wish the public to
believe, as evidenced by recent environmental damage in Appalachian rivers, and
therecent
earthquakes that struck Arkansaswhen natural gas injection wells appeared to disturb
local fault lines.

On the other hand, there may be cases where the
costs outweigh the benefits, and domestic drilling makes sense. After
all, environmentalists often paint an equally biased picture, albeit with less
financial resources. The truth, as is typical in such debates, likely
lies in the middle.

At the end of the day, though America faces the
real issue that its domestic petroleum supply is a finite product and will run
out -- sooner or later. That leaves America dependent on foreign oil,
which isvolatile
both in price and in politics.

The tough question is what to replace the oil
with.

III. The Long Term View

Biofuels seem an attractive alternative, given
that they only require sunlight, typically (as most are plant based) and can
produce high-octane fuel blends resembling petroleum products. Further,
these blends typically are cleaner, with less sulfides and nitrides than
typical petroleum fuel.

Of course the DoD could also look to nuclear
fission power, combined with EVs to greatly reduce its transportation related
fuel consumption in the short term. Such a suggestion might have trouble
flyingin
nuclear fearful America, though.

In the long runfusion
may also provide a possible alternative energy sourcefor
defense transportation. But the problem of energy storage is likely to
remain for some time. Unless researchers can develop a fusion reactor
small enough to fit in a jet, or a battery vastly more energy-dense than
today's designs, the only solution is a chemical fuel. And the choice for
chemical fuel today are pretty much oil, ethanol, or biofuels.

The DoD thinks biofuels are the most attractive of
those choices to use in defending the United States.

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